[img]1697|left|Mr. Carmen Trutanich||no_popup[/img]Los Angeles City Atty. Carmen Trutanich’s re-election campaign yesterday urged the city Ethics Commission to broaden its investigation of campaign finance irregularities by candidate Mike Feuer to determine if Mr. Feuer’s campaign were illegally subsidized by three other campaigns, including that of mayoral candidate Wendy Greuel.
In an amended complaint filed with the city ethics watchdog yesterday morning, the Trutanich campaign pointed out that while Mr. Feuer paid his consultant, John Shallman, less than $8,000 for his services, the Greuel, Mike Bonin and Gil Cedillo campaigns combined paid Mr. Shallman (who was also their campaign consultant) approximately $505,000 to provide similar services over the same period.
“These billing discrepancies do not pass the smell test,” said Rick Taylor, Mr. Trutanich’s chief strategist.
“It doesn’t take a lot of imagination to wonder if Feuer’s consultant can afford to bill the Feuer campaign next to nothing for his services because that same consultant is being well paid by the other city candidates he’s representing.
“It looks like these other campaigns are illegally – but probably unwittingly – subsidizing the Feuer campaign. When something looks like a subsidy, walks like a subsidy and talks like a subsidy, it probably is a subsidy. This is a shell-game. Pure and simple.”
Mr. Taylor urged the city’s Ethics Commission to complete a top-to-bottom investigation of the Feuer campaign. “The voters deserve answers before they go to the polls on May 21,” said Taylor.
On March 1, the Trutanich campaign filed its first complaint against the Feuer[img]1610|right|Mr. Mike Feuer||no_popup[/img] campaign, pointing out that Mr. Feuer indisputably has received an illegal in-kind contribution to his campaign from Mr. Shallman. That illegal contribution consists of the true value of Mr. Shallman's consulting services which, based on Mr. Shallman's normal fees, would be worth $150,000 to $250,000 to Mr. Feuer. Yet Mr. Feuer has paid Mr. Shallman less than $8,000.
“We believe the virtually free services Shallman is providing to Feuer constitute a huge, illegal in-kind contribution by Shallman to Feuer,” said Mr. Taylor. “When a contribution – monetary or in-kind – exceeds $1,300 per city-wide candidate per election, it is illegal. That’s not me talking. That’s the city ethics law.”
“In our first complaint we identified that Feuer has received a giant, illegal campaign contribution from his consultant – and now with our amended complaint, we’ve identified the illegal funding mechanism behind the illegal contribution,” said Mr. Taylor.
“Feuer is making a mockery out of the campaign finance laws that have served this city well for more than 20 years,” said Mr. Taylor. “The Ethics Commission must act quickly to dismantle Feuer’s illegal schemes before this termed-out assemblyman wrecks the entire campaign finance system in his lust for power.”
A copy of the complaint and Attachment 1 (the details of the complaint) are below. Links to two other exhibits, from city Ethics Commission records, are available. Attachment 2 shows how much Mr. Feuer paidMr. Shallman. Attachment 3 shows how much Ms. Greuel, Mr. Bonin, Mr. Cedillo and Mr. Feuer paid Mr. Shallman over the same period, for the same election.
Mr. Schwada, director of communications for the Trutanich campaign, may be contacted at john.schwada@gmail.com
AMENDED COMPLAINT: Candidate Mike Feuer is now in receipt of approximately $150,000 to $250,000 in illegal in-kind campaign contributions from his chief consultant, John Shallman. The illegal contributions consist of the value of the consulting advice and services Shallman has provided to the Feuer campaign. Although it is widely known that Shallman is Feuer's chief consultant, the Mike Feuer for City Attorney 2013 campaign (#1341335) has paid Shallman only $7,871.43 (three payments, the earliest made on Oct. 22, 2012) as of his latest campaign statement, filed with your office. When he ran Carmen Trutanich's DA’s race, for example, Shallman was paid $20,000 a month for his consulting services. (See Attachment 2 for Feuer’s payments to Shallman).
Bottom-line: Shallman's deferral of his consulting fees over the last 10 to 12 months that he has been openly working for Feuer consists of an illegal in-kind contribution to Feuer. That contribution gives Feuer an unfair advantage in his run for City Attorney. It is simple: by deferring payments to Shallman, Feuer has an additional $150,000 to $250,000 to spend on his political ad campaign. This is unethical. This is cheating the voters. This is a violation of the city's laws that prohibit contributions from a single individual in excess of $1,300 per election cycle (to a citywide candidate) – whether it’s a monetary or in-kind contribution. The only way such an in-kind gift of services can be made and not be counted as a “contribution” per se, according to our reading of the city ethics laws, is if there is no agreement or expectation that the services will ever be compensated. Yet we read in the LA Times that Shallman does have some kind of contract with Feuer regarding a “victory bonus.”
We also wish to amend the complaint we previously filed on March 1, 2013 to include the following serious concerns. Upon review of city Ethics Commission records, we have determined that Shallman Communications had four clients in the March 5 primary (Feuer, Wendy Greuel, Mike Bonin and Gil Cedillo). The total paid by the Greuel, Bonin and Cedillo campaigns to Shallman Communications was $505,779.94. The amount paid by the Feuer campaign was, as previously stated, only $7,871.43. (See Attachment 3 for payments to Shallman from Feuer, Greuel, Bonin and Cedillo).
It does not take a great deal of imagination to wonder if the Greuel, Bonin and Cedillo campaigns bankrolled the cost to Shallman of providing services to the Feuer campaign. An illegal subsidy? A Ponzi scheme? It begins to sound like it’s possible. How much money could those campaigns legally contribute to Feuer? $1,300. But it looks like those three campaigns may have unwittingly subsidized the Feuer campaign to the tune of tens and tens of thousands of dollars. It might also be argued that persons who gave the maximum to the Feuer campaign and also gave to the Greuel, Bonin and Cedillo campaigns may have unwittingly broken their cap on contributing to Feuer when their contributions to Greuel et alia actually were diverted/transformed into secret subsidies to Feuer.
Mike Feuer is an attorney. He's running for city attorney. He should know the law. Feuer signed his campaign statements under oath attesting to their accuracy. What's accurate about these statements when they fail to acknowledge the giant in-kind contribution his campaign has received from Shallman? How could Feuer not know his campaign consultant was not charging him for his services as they were being delivered? How could he not suspect that this constituted an illegal, in-kind contribution? How could Feuer or Shallman not ask for guidance from the city Ethics Commission staff before engaging in a scheme that – viewed even in the best light – was highly questionable?
Shallman's deferral of his fees to his client enables Feuer in a 100 yard race to start the race on the 50 yard line. This is cheating the other candidates and cheating the voters.
We strongly urge the City Ethics Commission to immediately investigate this serious and blatant violation of the letter and spirit of the city's ethics laws.
Rick Taylor and I are jointly filing this complaint, and we jointly permit the City Ethics Commission to make our complaint public.
